Chobani and Yahoo: Yes, Search Ads Really Can Lift Sales

Chobani targeted ads at people searching on Yahoo for certain terms, and saw them buy more of its yogurt than those who weren't served the ads.

Search engine advertising, like any other marketing, is purchased to entice people to buy more. Now there's a new way to show if it actually works.

A test conducted by Yahoo showed that people searching for yogurt-related terms who were served up Chobani advertising actually bought more of the Greek yogurt than those who did not see the ads. The test could essentially match households from their use of the Yahoo search engine through to actual grocery store checkouts, going well beyond just tracking if someone clicked on an ad.

People served Chobani's search ads spent 9% more on the brand than those who searched for the same kinds of yogurt-related phrases who were not targeted with the brand's ads, the parties involved in the 2015 test said.

"It was pretty compelling to us because it's not really about one search provider versus another. It was about our ability to track and trace," said Chobani Chief Marketing and Brand Officer Peter McGuinness.

Mr. McGuinness, who spent years on the agency side of the business before he joined Chobani in 2013, has long been looking for ways to measure just how well different marketing elements can perform. Chobani has run search ads with Yahoo for a while, but wanted to know just how effective they were. The study used household data on demographics, purchase history, regional purchase behavior and buying cycles.

"It's yet another proof point that advertising in any form, on any channel, has merit and effectiveness. It just helps further justify budgets overall, and specifically in search," Mr. McGuinness said.

The study ran during May and June and measured sales in that period and for the next four weeks. The methodology was set up to match an exposed group with an unexposed group on hundreds of variables. Therefore other elements, including product introductions and the 10 cups for $10 promotions Chobani runs, were not an issue in the measurement, the parties said.

The joint venture Nielsen Catalina Solutions (NCS) has been doing digital sales measurement for more than a decade, starting with Yahoo. Now, it can measure actual in-store sales resulting from search advertising, a method of tracking that was not available for consumer packaged goods advertisers before, said Francine Faiella, senior director, client consulting, Nielsen Catalina Solutions.

At this point, between eight and 10 such studies have been conducted, though neither Yahoo nor Nielsen Catalina shared details on the other studies. "Now that we've got a handful of measurements under our belt, we're starting to see some trends, and it's becoming clear that search advertising can be very effective," Ms. Faiella said.

Plus, increased exposure led to higher sales gains, said Jessica Lauria, Chobani's senior director, brand communications. When people were exposed to ads multiple times, there was an increased rate of purchase. And, "once the campaign ended there was a dropoff," Ms. Lauria said.

For now, the test has not led to a fundamental shift in Chobani's marketing spending. However, Mr. McGuinness said: "I would absolutely consider increasing SEO and SEM."

A test proved what marketers would hope: serving up ads at the right time really does help lift sales.